Three different research and consulting firms can agree on one thing-the primacy of policy admin systems in insurance IT budgets. Numbers from SMA Research's "Insurance Ecosystem" show that even relative to other customer-facing processes such as claims and billing, policy servicing remains a priority. Of the 126 insurers the research firm surveyed, 52 percent indicated they intended to increase spending on policy admin systems, compared to 38 percent for billing and 42 percent for claims.
These numbers reconcile with findings from Celent's "2012 CIO/CTO" survey, which found policy administration the top priority for new project spending among respondents, with claims (13 percent) and underwriting (12 percent) coming in second and third.
Elsewhere, research from Novarica finds a similar enthusiasm with 17 percent of the insurers surveyed indicating that were making major enhancements and 37 percent indicating they were planning or in the midst of a replacement. Novarica's "US Insurer IT Budgets and Projects for 2012" report also reveals discrepancies based on insurer size and line of business. Large life/annuity carriers (40 percent) were more likely to cite policy admin as a top investment priority as small and midsized life/annuity insurers (27 percent). A similar dynamic was evident on the property/casualty side with small P&C carriers (13 percent) the least enthusiastic.
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